OCR GCSE Business J204 | 200 Essay Vocabulary Words

Learn 200 OCR GCSE Business words for interpreting case information, explaining business effects and writing a justified decision. Each entry has a plain-English meaning and an example.

OCR GCSE Business J204 has two 90-minute papers worth 80 marks and 50% each. Business 1 assesses business activity, marketing and people. Business 2 assesses operations, finance and influences on business, including links across the course.

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Top 200 words for essay writing

1–20 Business decisions across the OCR papers

business activity — organised provision of goods or services. link the business activity to customer needs.
enterprise — initiative in starting or developing a venture. enterprise involves judging whether an idea can serve a market.
business objective — a result a firm wants to achieve. select the objective relevant to the decision.
business plan — a document setting out objectives, operations and expected finances. use the business plan to explain an investment request.
customer need — a requirement a product or service can meet. identify which feature addresses the customer need.
market segmentation — dividing a market into groups with shared needs or characteristics. use market segmentation to target a promotion.
recruitment — attracting and selecting people for a role. assess recruitment when a specific skill is scarce.
motivation — the incentives and reasons affecting how people work. consider which reward would improve motivation.
training — developing the skills or knowledge needed for work. compare training cost with the effect on errors.
supplier reliability — how dependably a supplier meets agreed delivery and quality requirements. test supplier reliability using its delivery record.
procurement — the process of obtaining goods or services from suppliers. procurement affects cost and availability.
stock control — monitoring and planning inventory. effective stock control can reduce delays and waste.
quality control — checking output against standards to identify defects. quality control can catch a fault before sale.
break-even output — the number of units at which total revenue equals total cost. compare the sales forecast with break-even output.
cash-flow forecast — a projection of cash receipts, payments and balances. identify when a forecast shows a cash shortage.
trade credit — an arrangement to buy from a supplier and pay later. trade credit can change the timing of cash outflows.
retained profit — profit kept in the firm rather than distributed to owners. retained profit can finance an equipment purchase.
exchange rate — the price of one currency in terms of another. an exchange-rate change can affect the cost of imported supplies.
ethical sourcing — choosing suppliers using stated ethical criteria as well as business needs. weigh the cost and reputation effects of ethical sourcing.
environmental impact — an effect an activity has on the natural environment. compare the environmental impact of two packaging options.

21–40 Operations and decision-making vocabulary and related writing vocabulary

inventory — materials or products held by a business. explain how extra inventory ties up cash.
buffer stock — extra stock held to reduce the chance of running out. judge whether variable demand justifies holding more stock.
stockout — a period when an item needed or wanted is unavailable. trace how a stockout can cause missed sales.
lead time — the interval from placing an order until it arrives. explain why a shorter lead time can reduce advance ordering.
order frequency — how often a business places orders. relate more frequent orders to delivery charges.
delivery reliability — how consistently deliveries arrive as agreed. compare reliability when a missed delivery would halt production.
quality assurance — using planned processes to prevent faults. connect staff training to a more consistent production process.
job production — making one item or completing one order at a time. explain why a tailored product suits job production.
batch production — making a group of similar items together before switching to another group. link batch size to the time taken to change equipment.
flow production — making standardised products through a continuous sequence of stages. explain why predictable high demand can support flow production.
capacity — the maximum output achievable over a period given available resources. check whether the business can meet a large additional order.
unit cost — the cost attributable to one unit of output. compare the effect of a rent increase at two output levels.
stockholding cost — the cost of storing and managing inventory. include storage costs when comparing discounts for bulk orders.
supplier dependency — reliance on a particular supplier for a business need. assess whether a backup supplier reduces disruption.
consumer protection — measures that safeguard buyers in transactions. link clear information about returns to customer confidence.
interest rate — the percentage used to calculate the cost of borrowing or return on saving. explain how a change affects a variable-rate loan.
free rider — someone who benefits without contributing to the cost. a free rider may still benefit from street lighting.
takeover — acquisition of control of another business. a takeover may add distribution capacity quickly.
integration — combining activities or businesses, such as different stages of supply. vertical integration can change control over inputs.
synergy — a gain expected from combining activities beyond what they deliver separately. test whether savings justify the claimed synergy.

41–60 Enterprise, growth and business choices and related writing vocabulary

entrepreneur — a person who starts or develops a venture and takes on its risk. the entrepreneur tests demand before borrowing.
business aim — a broad purpose the business wants to achieve. distinguish an aim of growth from a measurable sales target.
competitive advantage — a feature or capability that helps a business perform better than rivals. show why faster service could provide a competitive advantage.
added value — selling price less the cost of bought-in materials and components in this business sense. explain how custom design may increase added value.
market map — a diagram positioning competitors on two chosen attributes. check how the market map measures quality.
primary market research — research collected directly for the business’s question. use primary market research to compare two prices.
secondary market research — use of existing information to investigate a market. published population figures can support secondary market research.
franchise — an arrangement allowing a business to use another firm’s brand and model under agreed terms. compare the support and restrictions of a franchise.
e-commerce — buying and selling through electronic channels. e-commerce can widen the market while adding delivery demands.
organic growth — expansion through the business’s own activities. opening another branch is a form of organic growth.
inorganic growth — expansion through joining with or acquiring another business. compare the speed and risks of inorganic growth.
economies of scale — reductions in average cost associated with operating at a greater scale. bulk purchasing may reduce average input costs.
profit margin — a specified measure of profit as a percentage of revenue. compare firms using the same measure of profit margin.
gross profit — revenue minus cost of sales. higher costs of sales can reduce gross profit.
cash flow — movement of cash into and out of a business over a period. a profitable business may still face a cash-flow shortage.
stakeholder — a person or group affected by or able to affect a business decision. compare how the decision affects staff and customers.
competitive positioning — the place a business aims to occupy relative to rivals. consistent service can support premium positioning.
purpose — the reason a business exists. connect the decision to the business’s stated purpose.
price elasticity — the responsiveness of quantity demanded to a change in price, measured proportionally. use price elasticity to assess the likely sales effect of a price rise.
forecast — an estimate of a future outcome based on data and assumptions. a sales forecast depends on repeat purchases.

61–80 Operations, people and finance in a GCSE business case and related writing vocabulary

supplier — a person or business that provides inputs. compare supplier reliability and price.
just-in-time — ordering or receiving inputs close to when they are needed. just-in-time can reduce storage costs if deliveries are reliable.
customer satisfaction — the extent to which an offering meets customer expectations. measure customer satisfaction using feedback and repeat custom.
job description — a document setting out the main responsibilities of a role. a clear job description helps applicants understand the duties.
person specification — a statement of the skills or attributes needed for a role. use the person specification to compare applicants.
induction training — initial training introducing an employee to the workplace. induction training can reduce mistakes in the first week.
on-the-job training — learning while carrying out work in the workplace. on-the-job training may fit a routine task.
off-the-job training — learning away from normal work duties. off-the-job training can provide access to specialist equipment.
organisational structure — how roles, reporting and responsibilities are arranged. explain how structure affects communication.
span of control — the number of workers who report directly to a manager. a wider span may reduce time for individual supervision.
margin of safety — the difference between actual or expected sales and break-even sales. a small margin of safety increases exposure to weaker demand.
market research — collecting and analysing information about customers or markets. market research can test demand for a new service.
extension strategy — a change intended to keep an existing product selling for longer. new packaging can form part of an extension strategy.
sensitivity analysis — a test of how an outcome changes when an assumption varies. test the effect of higher labour costs on the projection.
labour productivity — output produced per unit of labour input. compare output per paid hour across the two sites.
capacity utilisation — actual output as a percentage of available production capacity. low utilisation can leave fixed resources idle.
operating profit — profit from operations before interest and tax. compare operating profit with cash generated from operations.
gearing — a measure of reliance on debt in a business’s capital structure. high gearing can increase exposure to interest costs.
liquidity — ability to meet short-term obligations. delayed receipts may put liquidity under pressure.
opportunity cost — the value of the next best option forgone. the investment’s opportunity cost may be a delayed warehouse upgrade.

81–100 Business decisions and their consequences and related writing vocabulary

margin — a measure of profit or contribution relative to sales, depending on the measure. compare operating profit margins.
internalise — bring an external cost or benefit into a decision-maker’s incentives. a charge may internalise an external cost.
market share — the proportion of sales in a market accounted for by a firm. state whether market share is measured by volume or revenue.
brand loyalty — a tendency for customers to keep choosing a particular brand. compare brand loyalty with the effect of a one-off discount.
target market — the group of customers a business intends to serve. identify which feature matters most to the target market.
customer service — support given to customers before, during or after a sale. better customer service may encourage repeat purchases.
induction — introductory training for a new employee. induction can reduce early mistakes.
delegation — giving someone authority to carry out a responsibility. delegation can free the owner to work on expansion.
labour turnover — the rate at which employees leave a business. high labour turnover can increase replacement costs.
inventory control — planning and monitoring the amount of stock held. inventory control can reduce shortages and excessive stock.
excludability — the ability to prevent people from using a good. excludability affects how a service can be financed.
internal finance — funds generated within a business, such as retained profit. internal finance can avoid additional borrowing.
external finance — funds obtained from outside the business. compare the cost and risk of external finance options.
interest — the price paid for borrowing or the return earned on savings. higher interest can raise the cost of funding expansion.
decision tree — a diagram showing options, possible outcomes and their probabilities and values. check the assumptions before comparing expected values.
diseconomies of scale — increases in average cost that can arise as production scale grows. coordination problems can create diseconomies of scale.
retrenchment — deliberate reduction of activities to improve viability or focus. retrenchment may release cash while reducing market coverage.
contingency plan — a plan prepared for a possible disruption or alternative outcome. a contingency plan identifies a backup supplier.
measure — an action taken to address a problem. introduce a temporary measure.
working capital — current assets minus current liabilities. inventory and receivables tie up working capital.

101–120 Customers, costs and small-business decisions and related writing vocabulary

rivalry — the extent to which one person’s use reduces what others can use. rivalry increases when a road is congested.
sole trader — an individual who owns and runs an unincorporated business. a sole trader can make decisions quickly.
limited liability — a limit on owners’ personal financial responsibility for business debts. limited liability can affect an owner’s choice of business structure.
market segment — a group of customers with shared characteristics or needs. the shop targets a market segment that values convenience.
primary research — information collected directly for a particular purpose. the owner uses primary research to test interest in delivery.
secondary research — information already collected for another purpose. published local population figures are secondary research.
marketing mix — the combination of product, price, place and promotion decisions. adjust the marketing mix to suit the target customer.
distribution channel — the route through which a product reaches customers. direct online sales change the distribution channel.
promotion — communication intended to inform or persuade customers. compare the cost and reach of two forms of promotion.
fixed cost — a cost that stays unchanged as output varies within a relevant range and period. rent can be a fixed cost for a small bakery.
variable cost — a cost that changes as output changes. ingredients are a variable cost when more loaves are baked.
revenue — income earned from selling goods or services before costs are deducted. a higher price can reduce revenue if too many customers leave.
contribution per unit — selling price per unit minus variable cost per unit. each item contributes toward fixed costs and profit.
price floor — a legal minimum price. a binding price floor can create excess supply.
cash inflow — money entering a business during a period. card payments provide a cash inflow when they are received.
cash outflow — money paid by a business during a period. equipment purchases can create a large cash outflow.
stock turnover — the rate at which a business sells or uses and replaces its inventory. slow stock turnover may tie up cash.
customer loyalty — a tendency for customers to keep choosing a business or brand. reliable service can encourage customer loyalty.
tradable permit — an authorisation that can be exchanged and allows a specified activity. tradable permits place a price on emissions.
contribution — revenue minus variable costs, expressed per unit or in total. higher unit contribution helps cover fixed costs.

121–140 Taking a position

claim — a statement you want the reader to accept. make a claim.
stance — your position on a question. take a clear stance.
thesis — the central position or interpretation your response develops. support the thesis.
premise — an idea the argument starts from. question the premise.
assumption — something treated as true without being established. test the assumption.
assert — state a position firmly. assert that access matters.
argue — give reasons in support of a position. argue for a trial.
maintain — continue to hold or defend a view. maintain that the policy is fair.
contend — put forward a position that can be challenged. contend that the proposal is workable.
justify — give sufficient reasons for a decision or judgement. justify the expense.
advocate — publicly support an action or change. advocate for reform.
defend — answer criticism of a view or choice. defend a decision.
qualify — limit a statement so it applies only where warranted. qualify the conclusion.
concede — acknowledge a valid point made by the other side. concede that costs may rise.
rebut — answer an opposing claim with reasoning or evidence. rebut the objection.
counterargument — a reasoned objection to a position. address a counterargument.
reservation — a concern that makes agreement incomplete. express a reservation.
distinguish — show what makes two things different. distinguish cost from value.
criteria — standards used to judge something. agree on the criteria.
verdict — a final judgement reached after consideration. reach a verdict.

141–160 Using evidence and reasoning

evidence — information that helps establish a claim. draw on evidence.
example — a specific case that makes a general point clearer. give a concrete example.
illustrate — make an idea clearer through a case or detail. illustrate the difficulty.
demonstrate — show how or why something is true. demonstrate a connection.
substantiate — support a claim with convincing information. substantiate the allegation.
corroborate — provide independent support for an existing account. corroborate the witness’s account.
infer — draw a conclusion from available clues. infer a motive from the wording.
imply — suggest a meaning without saying it directly. imply that change is possible.
interpret — explain what something means in context. interpret a figure in context.
analyse — examine how parts work together. analyse the writer’s choices.
evaluate — judge the strength, quality or value of something. evaluate the proposal.
plausible — reasonable enough to believe given what is known. a plausible explanation.
credible — worthy of belief or trust. a credible source.
relevant — directly connected to the issue being considered. relevant to the question.
sufficient — enough for the purpose or conclusion at hand. sufficient for a limited trial.
representative — typical enough to reflect a larger group. a representative sample.
anecdote — a brief account of a particular incident. open with an anecdote.
limitation — something that restricts what a method or claim can establish. acknowledge a limitation.
contradict — state or show something incompatible with another claim. contradict the earlier finding.
synthesise — combine ideas from separate sources into a new account. synthesise competing accounts.

161–180 Explaining cause and effect

cause — produce or bring about an outcome. cause avoidable delays.
contribute — play a part in bringing about an outcome. contribute to overcrowding.
trigger — set a process or reaction in motion. trigger a review.
accelerate — make a process happen faster. accelerate the transition.
intensify — make something stronger or more severe. intensify competition.
exacerbate — make an existing problem worse. exacerbate existing inequalities.
mitigate — reduce the severity or harmful effect of something. mitigate the harm.
prevent — stop something from happening. prevent further damage.
deter — discourage someone from taking an action. deter people from taking risks.
enable — make an action possible. enable students to attend.
facilitate — make an action or process easier. facilitate access to training.
reinforce — strengthen an effect, belief or behaviour. reinforce an existing pattern.
undermine — weaken something, often gradually. undermine public trust.
sustain — keep something going over time. sustain the improvement.
displace — push something or someone out of an existing place or role. displace smaller operators.
redistribute — change how something is shared. redistribute public funds.
consequence — an outcome that follows an action or event. an unintended consequence.
mechanism — the process through which an effect occurs. identify the mechanism.
correlation — a pattern in which two things vary together. observe a correlation.
constraint — a condition that limits what can be done. work within a budget constraint.

181–200 Comparing options and weighing costs

benefit — a useful or favourable effect. a long-term benefit.
drawback — a feature that makes an option less attractive. a potential drawback.
monopsony — a market with a single buyer, or dominant buyer power in relevant usage. a firm with monopsony power can influence wages.
priority — something that deserves attention before competing needs. give priority to public health.
alternative — another way of achieving a goal. offer an alternative to driving.
feasible — possible to carry out with the available resources. a feasible timetable.
viable — capable of working successfully over time. a viable business model.
practical — suited to what can actually be done. a practical solution.
effective — able to produce the intended result. an effective response to congestion.
efficient — able to achieve a result with relatively little waste. efficient use of limited funds.
affordable — within the means of the people expected to pay. affordable childcare.
accessible — easy or possible for the intended users to reach or use. accessible public transport.
equitable — fair in light of differing needs and barriers. equitable access to training.
proportionate — appropriate in scale to the problem. a proportionate penalty.
substantial — large enough to matter. a substantial reduction in waste.
governance — how institutions make and carry out decisions. local governance shapes enforcement.
outweigh — be more important than something on the other side. the benefits outweigh the costs.
offset — counterbalance part or all of an effect. offset part of the expense.
allocate — assign money, time or resources to a purpose. allocate funds to local schools.
compromise — an arrangement that meets competing needs only in part. reach a workable compromise.

Exam requirements and worked examples

Recognise the longer writing in J204

Both papers are externally assessed and include a multiple-choice section. In Section B, use the question’s business context, the command word and the marks to judge the response needed. OCR includes quantitative skills and asks students to make business decisions using evidence. The evidence can be numerical or qualitative.

Business 2 includes synoptic assessment, which can draw links across operations, finance, marketing and human resources. Practise explaining how a decision in one area affects another. A calculation helps when it tests a decision. A case detail helps when you explain what would change because of it.

Worked comparison about changing suppliers

Imagine a small catering firm comparing two suppliers for packaging. One quotes a lower unit cost and delivers twice a month. The other charges more and can deliver every week. If demand changes quickly and the supplier fulfils orders promptly, more frequent deliveries could reduce the amount of buffer stock the firm needs. Lower prices could improve contribution if the firm can store enough packaging safely.

Suppose the cheaper packaging saves 12 pence per order and expected monthly sales are 500 orders. That is a potential £60 monthly saving before extra costs. Compare it with any storage costs or lost orders due to shortages. The result depends on whether sales match the forecast and whether both suppliers meet the same quality requirement.

A reasoned decision might favour the more frequent supplier during a trial if demand is uncertain and shortages would delay orders. If sales become predictable and storage is inexpensive, the cheaper supplier may become preferable. Explain which case fact changes the balance rather than reaching the same conclusion for every business.

Fencing Method for a decision word

Start with Delivery frequency matters. Add detail. The second supplier can deliver every week. Refine the tone. More frequent deliveries may help the firm respond to changes in demand. Add logic. That can reduce the amount of packaging it buys in advance, provided deliveries are dependable. Transfer the pattern to a shop ordering seasonal products.

Try fencing retained profit. Name the investment and the amount or availability of funds the case provides. Explain one effect of using internal finance and one alternative use for the money. The term supports a judgement when you connect it to what the firm can afford and what it would give up.

The Fencing Method for Vocabulary

Make a synoptic link explicit

Take a choice about production and connect it to finance and people. Faster equipment could raise output, but the firm may need funds to buy it and staff may need training. Explain when the higher capacity would be useful. If demand is already weak, the extra capacity might contribute little to the objective.

Now connect the same decision to customer service. Training and more consistent production could reduce delays or faults. Identify which outcome the case suggests customers value. Then use that detail to compare the benefit with the cost. This shows why the topic link matters to the business.

Use a case number as evidence for an option

Write the calculation with units and interpret the result. For a break-even question, state the output needed for revenue to equal costs. Then compare it with expected sales. If actual sales can vary widely, explain what would happen when they fall and how that affects the proposed action.

A favourable result can coexist with a cash-flow problem. If customers pay later but suppliers need payment immediately, the firm may need a short-term source of cash. Explain how the timing affects the decision. Use the same period and assumptions throughout the comparison.

Compare the effect on two stakeholders

Choose an option and identify the people it affects. For example, tighter stock control may reduce waste but increase the risk of delays for customers if suppliers miss deliveries. Compare each effect using the firm’s priority. A stronger answer explains why the consequences matter and who is most exposed to them.

Then choose the evidence the decision-maker should review. It might include supplier delivery records, waste figures and the number of missed orders. State which evidence could make you change the recommendation. Keep the final judgement focused on the question.

Frequently asked questions

Do both papers count equally? Yes. Does Paper 2 need links from elsewhere in the course? It includes synoptic assessment. Should every paragraph contain a figure? Use figures where they help explain or test an effect. What should a judgement include? State the choice and its strongest case-based reason.

Check whether your judgement fits the context

Change one condition in the case and see if your conclusion changes. A firm with a good cash balance can absorb a larger purchase than one facing an immediate shortfall. A firm with a dependable supplier may hold less buffer stock. State the condition that decides the outcome and make it visible in the conclusion.

Top 200 Vocabulary Words for OCR GCSE Business (J204) | Essay Writing